Michael R. Lied

Get In Touch

Allways East
Transportation, Inc., 365 NLRB No. 71 (2017)
is a recent case which provides a good discussion of labor law successorship
issues.

A
bargaining unit of school bus drivers and monitors employed by Durham School
Services provided transportation services for general and special education
students in Dutchess County New York. In early 2014, the Dutchess County
Department of Health (the “DCDOH”) rescinded the portion of the contract
pertaining to the transportation of special education students from Durham and
awarded it to Allways East Transportation, Inc. It further requested that Allways
assume operations as soon as possible, due to Durham’s poor performance.

In
order to satisfy the DCDOH’s request for expedited action, Allways leased a
facility in Wappingers Falls, New York, 54 miles from its headquarters in
Yonkers, New York, and 8 miles from Durham’s facility in Poughkeepsie. Unlike
the Yonkers facility and Durham’s Poughkeepsie facility, the facility in
Wappingers Falls did not have a maintenance yard; Allways’ yard in Yonkers was
tasked with maintaining the buses at both locations. To service the new routes
in Dutchess County, Allways also purchased a fleet of new buses, which were
generally of the same type and size as those used by Durham.

Allways’
president, Judith Koller, and her daughter, Vice President Marlaina Koller,
held a job fair to recruit new drivers and monitors. The DCDOH encouraged Allways
to hire drivers who were familiar with the special education students and
routes in Dutchess County, and provided it with a list of drivers and monitors
who had worked for Durham and their corresponding bus routes. Selected
applicants were then interviewed by Vice President Koller, at which time the
prospective employees’ wages were discussed. Ultimately, Allways hired 82
school bus drivers and monitors, of whom 62 had previously worked for Durham.
Upon hire, Allways gave employees its employee handbook. The drivers were assigned
bus routes similar to those they had driven with Durham, and some retained the
same monitor.

On
April 16, Teamsters Local 445, the Union, asserted that Allways was a successor
to Durham, and requested in writing that Allways recognize and bargain
collectively with it for the drivers and monitors based in Wappingers Falls. Allways
did not respond to that demand and has not recognized or bargained with the
Union at any time since.

Allways
began operations in Dutchess County on April 22, after the students’ spring
break. There was no hiatus in operations after the transfer of work from
Durham. From April 22 until the end of the school year in June, additional
drivers and monitors were needed in Wappingers Falls, so Allways shuttled 8 to
10 drivers and monitors daily from its headquarters in Yonkers to Wappingers
Falls.

Beginning
April 22, President Koller worked at the Wappingers Falls facility 4 to 5 days
per week to oversee operations and train the dispatchers based there. Toni-Ann
Francisco, the office manager in Yonkers, also worked at the Wappingers Falls
facility every day for the first 2 weeks of Allways’ operation there, during
which time she fine-tuned the drivers’ routes. In addition, Allways promoted
two drivers from Yonkers to dispatcher positions and permanently assigned them
to Wappingers Falls. Dispatchers relay information between drivers, parents,
teachers, and management and also ensure that all routes are covered daily,
assigning drivers to cover routes due to unexpected absences, and receive
requests for leave, which are then transmitted to other individuals for a final
decision. Several employees testified that they considered the dispatchers to
be their immediate supervisors.

After
Allways determined that close supervision was no longer needed at the
Wappingers Falls facility, President Koller and Office Manager Francisco
returned to their offices in Yonkers. where Allways’ management personnel are
permanently based. All firing, hiring, and discipline is done by either the
president or vice president. All payroll and human resources functions are
conducted in Yonkers. Monthly attendance sheets and daily Department of
Transportation reports from both locations are retained there too.

The
Union filed unfair labor practice charges, which were rejected by an
Administrative Law Judge after a hearing. The case proceeded to the National
Labor Relations Board. A majority of a three member Board panel reversed the
ALJ, over the dissent of the remaining panel member.

An
employer is a successor employer, obligated to recognize and bargain with a
union representing the predecessor’s employees, when (1) there is a substantial
continuity of operations, and (2) a majority of the new employer’s work force,
in an appropriate unit, consists of the predecessor’s employees SeeNLRB
v. Burns Security Services, 406 U.S. 272 (1972); Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27
(1987). The essence of successorship, however, is not premised on an identical re-creation
of the predecessor’s customers and business, but rather, on the new employer’s
conscious decision to maintain generally the same business and to hire a
majority of its employees from the predecessor in order to take advantage of
the trained work force of its predecessor. A.
J. Myers & Sons, Inc., 362 NLRB No. 51 (2015).

Here,
the parties stipulated that the operative date to determine successorship was
April 22, 2014,when Allways began providing transportation services for
Dutchess County. The parties also stipulated that, on that date, a majority of
the drivers and monitors employed at Allways’ Wappingers Falls facility were
previously employed by Durham. Therefore, there were only two remaining issues
to be resolved: (1) whether there was
substantial continuity of operations, and (2) whether Wappingers Falls facility
employees constituted an appropriate unit for collective bargaining.

The
ALJ found that the differences between Durham and Allways precluded a finding
of substantial continuity of operations. She further found that Allways successfully
rebutted the presumption that Wappingers Falls was an appropriate
single-facility bargaining unit.

With
respect to the issue of substantial continuity between predecessor and
successor operations, the Supreme Court has identified the following factors as
relevant to the analysis: (1) whether the business of both employers is
essentially the same; (2) whether the employees of the new company are doing
the same jobs in the same working conditions under the same supervisors; and
(3) whether the new entity has the same production process, produces the same
products, and basically has the same body of customers. Fall River Dyeing. Most
importantly, these factors are to be analyzed from the perspective of the
employees, i.e., whether they “understandably
view their job situations as essentially unaltered.”

Applying
the relevant factors, the majority found that there was substantial continuity
of operations. First, Durham and Allways, performed the same general business
service: providing school bus transportation for the special education students
in Dutchess County. The drivers and monitors were doing the same general job
transporting special education students by school bus on a predetermined route.
In many cases, pursuant to Dutchess County’s request, the drivers were paired
with the same monitors, drove similar routes, and transported many of the same
students. Accordingly, the drivers and monitors were doing the same job as
before and without any hiatus in operations, only now their employer is Allways,
not Durham. SeeA. J. Myers & Sons, Inc., 362 NLRB No. 51 (2015); Van Lear Equipment, Inc., 336 NLRB 1059
(2001); Montauk Bus Co., 324 NLRB
1128 (1997).

The
panel majority acknowledged that there were some minor differences in Allways’
operations and in the employees’ terms and conditions of employment. For instance, Allways had a new facility,
different supervisors, wages, fueling procedures, and employee handbook
policies. Nevertheless, from the perspective of the drivers and monitors who
had been handling special education transportation for Durham, their job
remained essentially unchanged. See A. J.
Myers & Sons, Inc. (differences in buses, location, and supervision did
not defeat finding of continuity of operations); Montauk Bus Co. (finding substantial continuity despite “some
differences in the way Montauk operates and also differences in the wages and
terms and conditions of employment”). When viewed from the employees’
perspective, these minor operational changes made by Allways would not so
change employees’ job situation “that they would change their attitudes about
being represented.” Van Lear Equipment, Inc. Accordingly, the majority found that there was
substantial continuity of operations.

As
to the appropriate-unit issue, the Board has long recognized the presumption that
a single plant or store unit is appropriate for purposes of collective
bargaining unless it has been so effectively merged into a comprehensive unit,
or is so functionally integrated, that it has lost its separate identity, Dean Transportation, Inc., 350 NLRB
(2007), enfd. 551 F.3d 1055 (D.C. Cir. 2009). The party opposing a
single-facility unit has the heavy burden of rebutting its presumptive
appropriateness. Trane, 339 NLRB 866
(2003) To determine whether the presumption has been rebutted, the Board examines
a number of community-of-interest factors: (1) central control over daily
operations and labor relations, including the extent of local autonomy, (2)
similarity of skills, functions, and working conditions, (3) degree of employee
interchange, (4) distance between locations, and (5) bargaining history, if
any. J&L
Plate, 310 NLRB 429 (1993).

The
majority found that the ALJ improperly analyzed the community of interest
between the employees at Allways’ two facilities without first giving
sufficient weight to the presumption that the single facility of former Durham
employees at Wappingers Falls was appropriate, before determining whether Allways
met its rebuttal burden. The determination of appropriateness of a unit is
different in the context of successorship than when determining initially, in a
representation case, whether an unrepresented group of employees should be
included in a single or multiplant unit. Dean
Transportation, Inc. In addition,
the single-facility presumption is particularly strong where employees had
historically been represented in a single-location unit, as was the case here. Id.

The
majority concluded that Allways was a successor employer, and therefore that it
violated Sections 8(a)(5) and (1) of the NLRA by failing to recognize and
bargain with the Union as the exclusive collective bargaining representative of
the drivers and monitors employed by Allways in Wappingers Falls.

A
successor employer is ordinarily free to establish initial terms of employment
without first bargaining with the incumbent union, unless it is a “perfectly
clear” successor. Burns. Because there was no allegation that Allways
was a perfectly clear successor employer under Spruce Up Corp., 209 NLRB 194 (1974), enfd. mem. 529 F.2d 516 (4th
Cir 1975), it was free to set the initial wage rates of drivers and monitors.

Allways
admitted that it terminated Wappingers Falls driver Sherry Siebert without
affording the Union notice and an opportunity to bargain over the decision. Relying on the rationale articulated in Alan Ritchey, Inc., 359 NLRB 236 (2012),
the General Counsel argued that Allways should have provided the Union with
notice and an opportunity to bargain prior to terminating Seibert. Although Alan
Ritchey was invalidated by the Supreme Court, in Total Security Management, 364 NLRB No. 106 (2016), the Board held that
employers must provide unions with notice and the opportunity to bargain prior
to the implementation of all discharges, demotions and suspensions. The Board
held, however, that this decision was not to be applied retroactively. As a result, under the circumstances presented
in this case, Allways had no duty to bargain with the Union prior to
discharging Siebert. The majority adopted the ALJ’s dismissal of this
allegation.

After
discovering that Siebert had been terminated, the Union requested via email a
list of all employees who had been terminated since April 22. Allways did not
reply to the email or provide the requested information. An employer is
obligated to provide a union with requested information that is relevant to the
union’s proper performance of its collective-bargaining obligations. See Boeing Co., 363 NLRB No. 63 (2015). Allways
repeated its argument that it had no duty to respond to the information request
because it was not a successor employer. The General Counsel contended that without
such information, the Union would not know which employees remained in the bargaining
unit, thus preventing it from carrying out its representative duties. The
majority agreed, and found that the requested information was clearly relevant
and that Allways violated Sections 8(a)(5) and (1) by failing and refusing to
furnish it to the Union.